14th Dec, 2017

Leaving EU could lead to 'dip in house prices', Evesham estate agent says

Joshua Godfrey 10th Jun, 2016 Updated: 20th Oct, 2016

AN EVESHAM estate agent has claimed if Britain votes to leave the European Union it could lead to ‘higher interest rates and a dip in house prices.’

The comments made by Tom Tarver, Director of Johnsons Property Consultants, follows a warning by Prime Minister David Cameron last weekend that the cost of an average mortgage in the UK could rise by nearly £1,000 a year if Britain leaves the EU.

The warning is based on a Treasury report which suggested uncertainty caused by exiting the EU could tighten credit conditions and push up rates.

However, the claims have been rubbished by Vote Leave who have called it an ‘act of desperation’ and claimed even pro-EU campaigners have admitted the economy will grow even after a Brexit.

Speaking to the Observer, Mr Tarver said: “A vote to leave would likely cause a short-term economic jolt, which may well result in higher interest rates and a dip in house prices.

“For highly geared landlords with a lot of borrowing, these effects could be very damaging.

“Meanwhile, some are questioning whether a drop in house prices could actually be a positive for the UK, where the average first time buyer is now in their late 30s.

“While property industry commentators continue to argue over whether Brexit would be damaging or positive for the property market, I personally suspect the impact would vary hugely from one region to another.

“In London, reduced foreign investment into property and banks could lead to falling prices and higher interest rates as demand falls.

“Back in Worcestershire, foreign investment is a less significant factor and house prices remain strong on the basis of robust economic growth in the region, low unemployment and an ongoing housing shortage.

“I suspect that whatever the referendum result, over the long-term Worcestershire property prices will continue to be driven by the same factors; a shortage of suitable homes and rising rents as a result,” he added.

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